Bill would ban site names mimicking U.S. agencies

[Bud Dickman]

By David Cay Johnston
http://news.com.com/Bill+would+ban+site ... 76659.html

Story last modified Tue Apr 17 05:26:26 PDT 2007


Daniel O'Donnell, president of the San Francisco company that owns the Web site IRS.com, is to ring the bell that begins trading on the American Stock Exchange this morning.
Hours later, in Washington, the House is scheduled to vote on legislation that clarifies the law barring for-profit companies from using names that sound like official government agencies.

Twice in the last three weeks, the Internal Revenue Service commissioner, Mark W. Everson, has warned about confusion over the official Web site of his agency and commercial firms playing off that confusion.

A Web industry trade group, the Computer and Communications Industry Association, issued a statement last week warning consumers that Web sites like IRS.com, IRS.org and IRS.net "make money by offering services that, in many cases, taxpayers could get for free through the IRS's official Web site, IRS.gov.

Intersearch.com, the firm that owns the IRS.com Web site, says that it is fully complying with the law and that it sees no reason to inform shareholders of the pending legislation, said Jennifer Faye Drimmer, its legal counsel.

She noted that the firm has had disclaimers on its home page for some time stating that it is not an official government Web site. Drimmer also said the firm does not believe that the law applies to Internet domain names.

The 1994 law bars "any" use of the name of the Treasury and Internal Revenue Service and their initials, logos and other symbols to solicit business. The law also states that a disclaimer is not a defense against either civil or criminal action.

The House vote would clarify the law by specifying that the prohibition against "any" includes Web site names.

Claudia Crowley, the chief regulatory officer for the American Stock Exchange, said Monday that the exchange had assigned its best special investigator to look into Intersearch's disclosure statements.

As recently as last month an image of the Treasury building in Washington was at the top of the IRS.com home page. Monday, after being asked about the Web site, the firm changed its disclaimers to make them more prominent, including putting the word "not" in capitals and underlined at the top left of its home page.

Drimmer also said she was confident that the company had properly reported to the Securities and Exchange Commission its relationships with H&R Block and Intuit, two major tax software firms.

Intuit said in interviews that it had ended its relationship with Intersearch.com last April and the total revenue it paid for advertising on the IRS.com Web site was less than $10,000. H&R Block said it ended its relationship last Oct. 31.

Intuit also said it sent a letter on March 5 demanding that Intersearch.com stop asserting that the two firms continue to have a relationship. O'Donnell, responding to the Intuit letter, said Intersearch would do its best not to use Intuit's name and logo, but could not guarantee that because of the way its search engine works.

Drimmer said this language was appropriate because it did business with Block and Intuit last year.

Intersearch.com reported that revenue last year rose to $25.6 million from $17.5 million in 2005 and attributed most of the increase to its purchase of the IRS.com Web site in September 2005. It paid $12.9 million for the domain name.

The IRS.com Web site directs customers to affiliated Web sites, including ones it directly owns, that have no disclaimers. One of these sites encourages people to pay $89 to have their tax returns filed.